What was the nominal return in year 3

Assignment Help Financial Management

Reference no: EM132031455

The TIPS bond has an annual coupon rate of 4.5%. The table below shows the history of inflation rates for the first three years of the bond's life.

Time	Inflation for year just ended	par value
0		$1000
1	3%
2	4%
3	3%

a. What was the nominal return in year 2?

b. What was the real return in year 2?

c. What was the nominal return in year 3?

d. What was the real return in year 3?

Reference no: EM132031455

Questions Cloud

What is the basis of the newly acquired office building : Dove assumes the $192,000 mortgage on the apartment house. What is the basis of the newly acquired office building

Explain the discovery of penicillin : Explain the discovery of penicillin?

Explain different kinds of audits made by each auditor : J. Cowan, an engineer, is the president of Arco Engineering. Identify the sources of practice standards applicable to each type of auditor

How do you prevent the spread of flu : How do you prevent the spread of flu? What do you think about taking antibiotics for the flu?

What was the nominal return in year 3 : The TIPS bond has an annual coupon rate of 4.5%. The table below shows the history of inflation rates for the first three years of the bond's life.

Role of vitamins and other micro nutrients : What do you think are the role of vitamins and other micro nutrients? How do the following transfer through the body?

Compute the amount received for the bonds : Jackson Company issued USD 100,000 face value of 15 percent, 20-year junk bonds on 2010 April 30. Compute the amount received for the bonds

At which the company should work the extra shift : At the end of the third year the company will receive payment of $650,000. Assume the IRR of this option exceeds the cost of capital.

What is targeted net income : Key Company has a targeted sales volume of $62,300 units. Total fixed costs are $31,200. The contribution margin per unit is $1.20. What is targeted net income

User Account

All Pages